If you're looking for some tech sector exposure, then you may want to check out these two stocks in this article.
That's because analysts at Bell Potter have just named them as ASX tech stocks to buy. Here's what the broker is saying about them:
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Hub24 Ltd (ASX: HUB)
The first ASX tech stock that Bell Potter is bullish on is Hub24. It is an investment platform provider with $84.4 billion of funds under administration (FUA).
Bell Potter has been impressed with the company's growth in FY 2024 and believes it is well-positioned to continue this positive trend in the coming years. In light of this, it feels its shares are undervalued at current levels. It said:
We reiterate our Buy recommendation. HUB looks cheap relative to other high growth specialist platforms and the outlook for principal net flows should underpin incremental earnings growth. Our preference is predicated on a large exposure to superannuation assets. Delivering on complex integrations is another tick in our view.
Bell Potter has a buy rating and $53.20 price target on its shares. This implies potential upside of 14% for investors from current levels.
Integrated Research Limited (ASX: IRI)
Another ASX tech stock that could be a buy according to Bell Potter is experience management solutions provider Integrated Research.
It designs, develops, implements, and sells solutions that optimise business-critical systems. This provides insights, monitoring, and support to keep payment hubs, unified communications ecosystems, and contact centres running as they should.
Bell Potter was pleased with the company's performance during the second half and notes that management now expects to hit the upper end of its guidance range for revenue and earnings. This has ultimately boosted the broker's confidence in the tech stock's outlook and underpinned an increase in its valuation. It said:
We have updated each valuation used in the determination of our price target for the forecast changes and also rolled forward the DCF by a year. We have also increased the multiples we apply in the PE ratio and EV/EBITDA valuations from 9.5x and 7.25x to 10.5x and 7.75x and also reduced the WACC we apply in the DCF from 10.2% to 9.7% due to the strong FY24 result and relatively positive outlook.
Bell Potter has put a buy rating and $1.05 price target on the company's shares. Based on its current share price of 90 cents, this suggests that upside of 17% is possible over the next 12 months.
